Welcome back to the Big Apple. Now pony up.
Pandemic-weary New Yorkers who fled the five boroughs at the height of the coronavirus crisis are returning to a city where the median Manhattan rent reached $4,000 for the first time ever, a new report says.
According to realtor Douglas Elliman, the skyscraping Manhattan rent in May was just over 25% what it was a year earlier, when the median rent was $3,195, a relative bargain at the time.
The figure also represents a 2% increase over what the rent was in April.
The average rental price in Manhattan was just under $5,000 in May.
“These rents are at heights we’ve never seen,” said said Hal Gavzie, the executive director of leasing at Douglas Elliman. “One of every four apartments is in a bidding war. That’s clearly an indication of demand.”
Gavzie pointed to several factors for the monstrous monthly fees. He said the price hike has been fueled, in part, by a demand among returning New Yorkers who hit the road during the worst of the pandemic days.
With schools reopening and jobs beckoning people back to their desks, workers are feeling the need to rejoin the rat race. That’s helped push Manhattan’s vacancy rate to a measly 1.8%, down from 7.6% in May 2021, Douglas Elliman found.
Another factor is flexibility. As working from home becomes more commonplace, renters are willing to pay more for spaces to accommodate the balance between their offices and their home.
Rising mortgage rates have also pushed city rents higher. Would-be home buyers priced out of the ownership market have taken the rental route, which was already pretty tight.
Gavzie said the rental surge is a good thing because it shows people are coming back to New York. The downside, he said, is affordability. Gavzie said he expects the market to correct itself, but he did not put a timetable on when.
“The whole market has been crazy,” Gavzie said. “Month after month we’ve been dealing extremely high demand with inventory.”
Outside Manhattan, it’s not much better.
In Brooklyn, the median rental price was $3,250 in May, an 18% jump from the previous year, Douglas Elliman reported. The company’s report also covers northwest Queens — an area that includes Astoria, Long Island City, Sunnyside and Forest Hills — where the median rent in May was $2,950, up 20% from May 2021.
Tyson Kelly, 38, a self-employed landscaper from Brooklyn’s Bedford-Stuyvesant neighborhood, fears what rising rents will mean for his bank account.
“I’m just waiting for my letter that says they want to increase my rent, which I’m sure is coming,” Kelly said.
“It’s sad for what they’re asking for nowadays. It’s like, geez, rents are already expensive and you want to raise the price some more?” Kelly asked.
“I’m talking about $2,000 for a studio and more for a one bedroom — that’s just crazy. I was born in New York, moved to South Carolina and recently moved back a few years ago. Let’s just say I‘m ready to move back to South Carolina with prices in this city.”
Olivia Simone, a 23-year-old market researcher, was born and raised in New York City, but she is not sure how much longer she’ll be able to stay. She is splitting her $2,400 Brooklyn rent with a roommate.
“My goal is to one day hopefully live by myself in a studio or in a one bedroom,” Simone said. “But the way things are going, rents are increasing and companies are asking for more and more just to be pre-approved as a renter.”
“I don’t know if I’m going to stay in the city forever,” Simone said. “But I could see myself living somewhere in Massachusetts or a small rural area as rent continues to increase.”
Is paying a high rent better than living somewhere less interesting and vibrant and interesting than New York? That’s the issue for Will Oliveira, who moved to the city last year from St. Louis.
“I was paying $1,000 In Missouri, to live in a townhouse,” said Oliveira, who works with autistic people. Now, he pays $2,000 for a place in Woodside, Queens, and counts himself lucky. Oliveira said his co-workers pay $3,000, $4,000 or $5,000 a month.
But it’s worth the price, he said. New Yorkers “have a lot of things to do ... different restaurants, sports attraction, touristic places to museums.”
But St. Louis “could have three touristic attractions. And that’s it.”
Oliveira’s advice to people who want to move to the city: Weigh the pros against the cons. “If it’s worth it, go for it,” he said.
